WARRANTY

6 Months Ended

Dec. 31, 2013

Product Warranties Disclosures [Abstract]

NOTE 3. WARRANTY

The warranty accrual is based on historical costs of warranty repairs and expected future identifiable warranty expenses, and is included in accrued expenses in the accompanying consolidated balance sheets. As of December 31, 2013 and June 30, 2013, the warranty reserve related to continuing operations amounted to $200,000 and $321,000, respectively. Warranty expenses are included in cost of sales in the accompanying consolidated statements of operations. Changes in estimates to previously established warranty accruals result from current period updates to assumptions regarding repair costs and warranty return rates, and are included in current period warranty expense. Total warranty expense for the three months ended December 31, 2013 and 2012 was $16,000 and $22,000, respectively, and for the six months ended December 31, 2013 and 2012 was $29,000 and $130,000, respectively.

Information regarding the accrual for warranty costs for the three and six months ended December 31, 2013 and 2012 are as follows:

	Three Months Ended December 31,
	2013			2012
Balances, beginning of period	$	229,000		$	585,000
Accruals during the period		47,000			38,000
Changes in estimates of prior period accruals		(31,000	)		(16,000	)
Warranty expenditures		(45,000	)		(246,000	)
Balances, end of period	$	200,000		$	361,000

	Six Months Ended December 31,
	2013			2012
Balances, beginning of period	$	321,000		$	526,000
Accruals during the period		96,000			186,000
Changes in estimates of prior period accruals		(67,000	)		(56,000	)
Warranty expenditures		(150,000	)		(295,000	)
Balances, end of period	$	200,000		$	361.000

In 2013, we reclassified certain amounts, previously classified as warranty expenditures, to a classification as out-of-warranty repair expenditures, which reclassification had an offsetting effect on the changes in estimates of prior period accruals. The 2012 amounts appearing in the tables above have been reclassified to conform to the 2013 presentation. Such reclassifications had no effect on the accompanying condensed consolidated balance sheets or statements of operations.